Gov. Chris Christie says he is ending a nearly 4-decade-old tax agreement between New Jersey and Pennsylvania, all but ensuring thousands of residents in each state will see their income tax burdens go up.
The Republican governor said Friday that he would reconsider his decision if the Democrat-led Legislature finds $250 million in savings from public worker health benefits.
The agreement allowed residents working in either state to pay taxes at their home state's rate. It was a good deal for wealthier Pennsylvanians who commuted to work in New Jersey but paid their state's lower rate and for lower-income New Jersey residents who benefited from their state's lower rates. Wealthier New Jersey residents working in Pennsylvania aren't likely to see much of a change.
A spokesman for Pennsylvania Democratic Gov. Tom Wolf says Christie's decision will "punish" 125,000 Pennsylvanians and will hurt the prospects for creating jobs in the region.
Either governor can pull out of the deal at the start of the year but must give 120 days' notice. The deadline for notice this year was Friday.
The Associated Press wire services contributed to this report.